Widening trade deficit hammers
KSE-100 down below 1,400 points
in intra-day trading

EA Report
Lahore, Dec2—Pakistan stocks got a hammering on Thursday with the benchmark KSE-100 index losing over 1,400 points or nearly 3.2% during the first half of the trading session as the market reacted sharply to the widening trade deficit data.
Index was hovering around the 43,900-point level — a fall of 3.2% — and heading for one of its worst days of the calendar year at noon,
The sell-off comes after Pakistan posted a massive trade deficit in November, denting economic sentiment.
Stocks fell across-the-board, following inflation reading that touched a 21-month high.
This has raised interest-rate hike expectations, analysts told Business Recorder, and could put the central bank on the path of even more aggressive monetary tightening.
The index opened with a positive bias and underwent a volatile session. The local bourse posted a high of 388pts, a low of 78pts and concluded with a gain of 297pts to settle at 45,369pts level.
Trading volumes decreased to 85Mn shares (?68.1% DoD) in comparison to the previous day’s tally of 109.6Mn shares.
50-SMA acted as a main hurdle during intra day trading. The index is currently sustaining below it.
Bollinger Bands are 58.96% wider than normal. The large width of the bands suggest high volatility as compared to the index normal range. Therefore, the probability of volatility decreasing and index could remain in a trading range. The bands have been in this wide range for the last five trading sessions.
The chart formation reflects that the index could find initial support near 44,900. A break below mentioned support could result into further weakness towards 44,600 and 44,300pts level.
On the other hand, the index could face resistance near 45,500pts on the higher side initially and then head towards 45,800 and 46,100 area.
Among the strength indicators, RSI clocked-in at 48.3 which is comparatively higher than the last trading session.
It is recommended to focus on profit taking near resistance zones and resume once the index manages to close above it.

Economic Affairs